Whatever happens in
Ukraine, the events of the past few months mark the start
of a period of frozen relations between Russia and the west. It
might not take the form of the old Cold War, as
Russia is much more integrated into the global economy than
the Soviet Union ever was and the ideological baggage that came
with the Cold War is also less relevant. But it will rearrange
the military deck in Europe and creates
new economic and geopolitical risks, both in the European
theatre and globally.

The real crisis is not
about Crimea, but about how the entire territorial map has
evolved since the end of the Cold War in 1991. For the west,
the evolution of Europe is perfectly acceptable. For Russia,
the inclusion into the EU and Nato of former satellites is pure
western encroachment. Ukraine’s desire for closer
co-operation with Europe (triggered at the EU’s
behest) is simply seen as taking this expansion to its extreme.
As a result, this is a crisis that will run and run, since it
cannot be resolved even if the immediate dispute over Crimea
passes.

Sense of
security

Western nations have
spent more than two decades telling eastern Europeans that they
should not worry about Russia; that today’s Russia
is not yesterday’s Soviet Union. But the eastern
Europeans have been proved right in their trepidation. Russia
is a menace to their security. So Nato will now have to redeem
the security guarantees it gave the eastern European nations
when these were incorporated into the US-led military alliance.
Nato military bases will be pushed further east in order to
reassure the eastern Europeans. Military equipment will also
have to be pre-positioned there. That fundamentally changes the
security equation in Europe.

Eastern Europeans have been proved right in
their trepidation. Russia is a menace to their
security

Nato and the EU have changed. Both of these key institutions
now include a sizeable number of eastern states. The eastern
Europeans are the biggest single bloc of identifiable countries
and all vote in unison when it comes to hostility towards
Russia. This forces Germany to make a choice: either maintain
its friendship with Russia, but lose Poland and render the EU
as a whole impotent, or stick with the Poles on an anti-Russian
policy and sacrifice friendship with Russia on the altar of
European cohesion.

All the indications are
that, for the moment, chancellor Angela Merkel will opt for the
latter. Her criticism of Russia is the most strident by any
German leader since the years of détente. The Germans
have spent decades trying to avoid choosing between Russia and
the new EU states, but the choice is now unavoidable, with
serious consequences that will not be easily reversed.

The fact that a military
invasion could take place in the heart of Europe in the 21st
century and that the invader has simply grabbed territory will
mean the overhaul of all current defence and military
assumptions. A massive rearmament is not in the offing, but
greater resources will have to be devoted to defence, and
particularly to tanks, armoured personnel carriers and
soldiers, the kind of territorial defence arrangements that
until recently Nato thought were no longer relevant.

There is also an urgent
need to diversify Europe’s sources of energy
supply to reduce dependency on Russian oil and gas. Although
the process will take years, once unleashed it will produce
results that are all but irreversible. This is inconvenient for
Europe, but far more harmful to Russia, whose infrastructure
centres on these markets. Then there are the more immediate
steps taken by the west that will hit Russian coffers.
Meaningful sanctions would do more than inconvenience
oligarchs’ wives’ shopping plans.
They would restrict access to financing as well as investment.
This is critically important given the technological gap from
which Russia continues to suffer, both within the resource
sector (aspirations for shale gas and oil are now likely to be
a nonstarter) and militarily.

There are incentives for Russia to step back. But Vladimir
Putin does not place economic benefits over what he sees as
geopolitical necessity. The result will be a long period of
frosty relations, punctuated by future episodes of brinkmanship
and crises.

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